The general consensus among the industry and seeping from the mainstream media is that the U.S. Senate will likely approve an extension of the $8,000 first-time homebuyer tax credit – and their decision could come as early Tuesday evening.

The housing tax stimulus is set to expire November 30, and some experts argue that if lawmakers allow it to lapse, it will jeopardize the market’s fragile and precarious recovery.

Senate leaders seem to agree. The pitch likely to gain the most traction on the chamber floor is an amendment drafted by Senate Majority Leader Harry Reid (D-Nevada) and Senate Finance Committee Chairman Max Baucus (D-Montana).

The proposal would extend the tax incentive until the end of 2010, but slowly phase it own throughout the year. The full $8,000 could be claimed for transactions through March 31, the credit amount would then drop to $6,000 in the second quarter of the year, $4,000 in the third quarter, and $2,000 in the fourth.

Sen. Johnny Isakson (R-Georgia) and Senate Banking Committee Chairman Christopher Dodd (D-Connecticut) are also planning to offer up their own homebuyer tax credit amendment. Their version would remove the first-time buyer requirement and make the tax incentive available to all who purchase a home. It would extend the tax credit until June 30, 2010, and raise the income limits to $150,000 for an individual or $300,000 for a couple.

The mortgage industry has been steadfast in its lobbying for an extension of the homebuyer tax break, but passage in the Senate would be only a partial-victory. The House of Representatives has yet to begin debating the matter, and the administration’s concern over the price tag of an extension continues to grow.

HUD Secretary Shaun Donovan told senators last week that there was “clear evidence” of the tax credit’s benefit to the housing market, but he said the real issue is whether an extension is worth what it will cost the government in lost tax revenue. The proposal would “be very expensive, especially at a time of significant budget deficits,” Donovan said.